The Fight Against Remote Sales Tax: New Hampshire’s Bold Move with HB 135
On January 8, 2025, New Hampshire introduced House Bill 135 (HB 135), which aims to prevent businesses in the state from being required to collect sales tax for another jurisdiction (i.e., another state). The bill explicitly states:
“No New Hampshire business shall be required to collect sales tax for a foreign jurisdiction (a.k.a., another state).”
Why New Hampshire Opposes Remote Sales Tax Collection
New Hampshire has long prided itself on being a sales-tax-free state, and HB 135 is the latest effort to reinforce that stance. One of the primary concerns driving the bill is how difficult it can be to collect and remit sales tax to multiple states. New Hampshire businesses argue that being forced to comply with out-of-state sales tax laws places an undue burden on them, requiring additional administrative work and potential legal risks.
Legal Challenges and the Path Forward
The bill is already facing significant legal and logistical challenges. One of the key hurdles to passing HB 135 is that New Hampshire cannot unilaterally dictate tax policies to other states. According to Scott Peterson, Vice President of Government Relations at Avalara, the bill assumes that other states will agree to make sales tax compliance easier for New Hampshire businesses. However, there is no legal requirement for them to do so. Peterson stated:
“The proposed bill says there is an obligation on the part of other states to make a good-faith effort to make sales tax compliance simpler for New Hampshire retailers.”
However, many tax experts believe other states will strongly oppose this bill. If passed, HB 135 could spark legal battles that may ultimately be decided by the U.S. Supreme Court.
Could HB 135 Succeed?
New Hampshire faces a tough battle in getting HB 135 passed and enforced. If New Hampshire wants to strengthen its case, it may need to gain support from neighboring states or seek a ruling from the Supreme Court. However, this approach comes with risks—if New Hampshire pushes too hard, other states may take retaliatory action, potentially requiring NH businesses to collect out-of-state sales tax despite the state’s opposition.
The Future of Sales Tax in New Hampshire
The fate of HB 135 remains uncertain. The bill is currently under review. If it passes, Governor Kelly Ayotte will have to decide whether to sign it into law. Given New Hampshire’s long-standing opposition to sales tax, it’s likely that the fight against out-of-state tax collection will continue—regardless of HB 135’s outcome. For now, New Hampshire businesses should stay informed about remote sales tax laws and consult with tax professionals to ensure compliance with existing regulations.
